National Tea Company Limited’s auditor has raised a going-concern uncertainty, citing Tk239.09 crore in accumulated losses, negative equity and weak financial controls in its audit report for the year ended 30 June 2025.
ARTISAN Chartered Accountants issued a qualified opinion along with a material uncertainty related to going concern and other matter paragraphs, pointing to persistent financial stress and accounting deficiencies.
The company reported negative equity of Tk95.68 crore and a negative net asset value per share of Tk144.97. Total borrowings stood at Tk443.28 crore while operating cash flows remained negative. Losses have continued since FY2019–20.
The auditor said these conditions create material uncertainty that may cast significant doubt on the company’s ability to continue as a going concern.
A key qualification relates to Tk238.84 crore classified under bearer plants, including tea bushes and shade trees.
The auditor said these assets have finite useful lives under IAS 16 and IAS 41 and should be depreciated accordingly. While the company has adopted accounting policies for biological assets, it has not determined asset lives, applied systematic depreciation or completed valuation using cost or revaluation methods.
A lump-sum provision of Tk3.16 crore was made, but prior-year depreciation adjustments were not incorporated. Immature bearer plants were also capitalised instead of being recorded as capital work-in-progress, potentially overstating property, plant and equipment, profit and retained earnings.
The report also flagged inconsistencies in the classification of borrowings. Long-term loans of Tk175.13 crore were not consistently presented, while accrued interest of Tk134.44 crore was not separately disclosed, limiting clarity over liabilities.
Employee benefit accounting drew further concern. The company reported a gratuity provision of Tk3.13 crore without transferring funds to a recognised gratuity scheme. Benefits were paid on a cash basis, which the auditor said may understate liabilities and does not comply with the Labour Act 2006.
Inter-garden and head office balances showed net unreconciled differences of Tk95.26 lakh, which were recorded as trade payables, overstating liabilities.
The auditor also noted non-compliance in the company’s rights issue. Shares were allotted before completion of regulatory requirements, while about Tk29 crore in proceeds were used to repay bank loans before clearance from the Bangladesh Securities and Exchange Commission.
Beyond financial reporting issues, the auditor cited control weaknesses, including ongoing land disputes at three tea estates and the absence of integrated accounting software. The company continues to rely on manual systems, increasing the risk of errors and delays in financial reporting.
The audit said these factors collectively weaken internal controls and financial reporting reliability alongside sustained losses and a high debt burden.
